MANUFACTURING NEXT

With companies increasingly embracing shared mobility services, the automotive industry is on an exponential growth path. Tech majors such as Google and Apple and leading original equipment manufacturers (OEMs) such as Volkswagen, PSA, General Motors, Geely, Daimler, and BMW are already venturing into autonomous and shared mobility services. In fact, banks – BNP Paribas, for instance – have already invested in sustainable mobility and in-car payments, and telecom providers – Verizon, for example – have launched value-added fleet services. According to a report by research firm Markets and Markets, the impact of COVID-19 will see the global ride sharing sector grow by 55.6% from 2020 to 2021 (https://www.marketsandmarkets.com/Market-Reports/covid-19-impact-on-ride-sharing-market-15098676.html). The market will touch $117.34 billion by 2021 from $75.39 billion in 2020. Growth in 2021 is estimated to decrease by 2% as compared to pre-COVID-19 estimates, the report stated. From a longer-term perspective, shared mobility will recover strongly, as no structural impact is anticipated.

With increasing fleet sizes and the advent of electric and autonomous vehicles, the average fleet manager’s responsibilities are becoming increasingly complex. As a result, fleet operators are turning to technology companies for help or are acquiring technology in-house to capitalize on opportunities. Depending on whether the function is outsourced or handled in-house, the fleet manager’s role could be within the manufacturer’s supply chain, 3PL, or in a technology company. So, the role of fleet managers now needs to cover the following three dimensions:

Updates on any executional hiccups such as customer unavailability and breakdowns will flow right into the mobile application, and the AI system – based on the crew’s live status – can prompt an optimal route for priority order assignment. This will enable fleet managers to utilize their freed-up bandwidth to review and weigh in on factors such as optimization of miles, cost, on-time delivery, and customer priorities through multiple what-if scenarios.

Strategic: Cost control, customer satisfaction, fleet rightsizing, hub and network design, and defining and monitoring KPIs are strategic to the success of fleet managers. To align the fleet’s priorities with organizational goals, they can collaborate with external partners, for instance, freight exchange platforms for commercial fleets.

Through such platforms, they would be able to match variable or temporary freight demand to available 3PL capacity. The fleet managers’ dashboards can also provide insights on profitable routes, granular spend break-up, demand indicators, and vendor performance, enabling managers to meaningfully contribute to strategic decisions.

Collaborative: Newer technologies such as internet of things, artificial intelligence, blockchain, and big data will give rise to business models such as micro-transit and autonomous shared services. This will result in the creation of high-tech fleets, which will require a combination of tech-enabled and manual approaches. For instance, manual interventions to sensor failures in autonomous vehicles or just keeping tabs on automatically updating dashboard of vehicles due for maintenance and their statuses. Fleet managers will have to collaborate with electrical grids and power sources to handle electric vehicles, and interface with transport modes such as rail and waterways to enable micro-transit and autonomous shared services.

In short, fleet managers leveraging the potential of a connected and complex ecosystem will have to transform into mobility managers. Though the basic need of transportation will remain the same, it’s the management that will change. With wider adoption of technology, there would be tremendous efficiency gains, newer business models, and an enhanced focus on fleet management as a strategic measure to impact the bottom line. If you are a fleet manager in 2020, it might be high time for you to stay abreast and adapt your skills to align with these expected transformations in your industry. That way you would give yourself and your company an edge over the others.

Karthikeyan S is a Business Consultant, working with TCS’ Manufacturing Business Group. With seven years of industry experience, he has extensively worked in the areas of shared mobility and fleet management. He has offered pragmatic approaches to customer challenges pertaining to their supply chain, logistics, and fleet management. Karthikeyan holds a post-graduate degree in marketing and operations from IIM Lucknow and a B.Tech degree from NIT Trichy.

Sandeep Behera is a Business Analyst with the Connected Fleet Strategic Initiatives at TCS. With over two years of experience in the IT industry, he is responsible for marketing, business analysis, and research in the supply chain and logistics domains. He holds B.Tech and M.Tech degrees in Electrical Engineering from NIT Rourkela, and is a management graduate from NITIE, Mumbai.